Interview with Neil Mitchell, 3AW

SUBJECTS: Pension, Budget, NDIS, Health

NEIL MITCHELL:

Federal Treasurer Joe Hockey, good morning.

TREASURER:

Good morning, Neil.

NEIL MITCHELL:

In a related area, we have been talking to people today about problems with Centrelink and hotlines and things like that but this message that Government is broken and you need to spend billions of dollars on the computers, is that right?

TREASURER:

Yes it is. It has been for me, Neil, the most surprising feature of coming into Government given that I was a minister for nine years under John Howard and I was in charge of Centrelink and Medicare at various points. The deterioration in the infrastructure of Government has certainly made policy development much harder and there are huge challenges ahead for us in that regard.

NEIL MITCHELL:

And expensive, I should think.

TREASURER:

Well it is. It is very expensive. The mainframe for Centrelink, which provides services to millions of Australians is aging, it is in bad shape, only Centrelink and the Pentagon in the United States are the only two customers in the world of this one company that maintains the Centrelink mainframe, which is extraordinary. But it is an indication that the infrastructure has been run down. The waiting time for a Centrelink phone call at the moment is 17.5 mins.

NEIL MITCHELL:

We get a lot of callers who would be happy with that. They’re waiting well over an hour.

TREASURER:

Well that’s right. Any business that keeps people waiting that long would fail. From my perspective that is not good enough. When I was Minister for Centrelink previously I think we had it down to about 6 minutes if not, less. So, this is just one of the problems we have inherited.

NEIL MITCHELL:

But that must mean cases are building up. You might be someone who is not entitled to payments, I mean, inefficiency is expensive isn’t it?

TREASURER:

Hugely expensive and it undermines productivity. It undermines the capacity of people to get on with their lives. You know, infrastructure is not only roads, rail, and electricity, and water, it is about the provision of essential services. Now, you know, the two most important computers arguably in the Government are the mainframe for the Australian Taxation Office and the mainframe for Centrelink.

NEIL MITCHELL:

Can you afford to fix it?

TREASURER:

We have to. We have to. We have got no choice. The question is how we do it and how we try and ensure we have better service delivery into the future.

NEIL MITCHELL:

What’ll it cost?

TREASURER:

Billions.

NEIL MITCHELL:

Where do you get it?

TREASURER:

From tax payers. Everything comes from tax payers. My overwhelming concern, Neil, and that is it is something that we just have to do. But my overwhelming concern is that it is inhibiting the capacity of the Government to some degree to roll out policy that properly addresses the problems in the economy and in the Budget. Now, there are no excuses and we still have to do what we have to do and all Australians will be making a contribution. Those who can afford to make more of a contribution will be doing so. But the fact is, now is the time to fix the Budget, now is the time to repair the Government.

NEIL MITCHELL:

Ok and this makes it more difficult. Well, you talk about making cuts, about everybody having to carry the load, how is it possible to justify the continuing Paid Parental Leave Scheme? While you’re cutting back everything else, this is vastly expensive.

TREASURER:

Well, the fact is, we are putting a levy on big business to pay for it.

NEIL MITCHELL:

It doesn’t pay all of it.

TREASURER:

It is covering it.

NEIL MITCHELL:

[Inaudible]

TREASURER:

Together with the abolition of the existing Paid Parental Leave Scheme it is fully covered by the levy. The fact is, Neil, we need everyone who can contribute through work to contribute to work. Now, for younger Australians it means you are either going to have to earn or learn. For middle aged Australians we need every shoulder to the wheel that has the capacity to work. The whole justification for the National Disability Insurance Scheme is to provide people with a disability with a chance to get into paid work. That is the justification for it. And for older Australians we need to give older Australians a chance to continue to work, so the suggestion that life ends when you turn 65 is ridiculous, but we have got to change the culture of the nation to facilitate older workers.

NEIL MITCHELL:

But is NDIS, the National Disability Insurance Scheme, untouchable?

TREASURER:

Well, we are rolling it out appropriately. The question is, and it has been properly addressed by Senator Mitch Fifield, who is doing a great job in this area, the challenge is to roll it out so that it does its job in an affordable manner.

NEIL MITCHELL:

So this is untouchable?

TREASURER:

Well, no, everything is going to be looked at to make sure that we are doing it as best we can in the most efficient way.A report recently came out, independent report, on the National Disability Insurance Scheme, and it said, it had a photo of a half built plane in the air on the front cover and it said, the current scheme inherited from Labor, and this is an independent report, said ‘the current scheme is akin to a plane trying to take off half built’. And what we have got to do is make sure that we don’t have another terrible roll out of a program like the pink batts program, which is not able to be properly rolled out and is certainly not effective in the delivery of services it promises.

NEIL MITCHELL:

So is there a possibility it won’t be ready?

TREASURER:

I think that that is quite clear from the report that Senator Fifield has released.

NEIL MITCHELL:

When is it due to begin properly?

TREASURER:

Well, it’s still got the trials, but the significant ramp up in expenditure occurs in 2017-18, where it goes from $1.8 billion to $4.5 billion and then it goes to $7 billion the following year and $8.6 billion, it keeps rising. We are currently considering it, it is not about delaying it, it is about making sure it is properly rolled out.

NEIL MITCHELL:

The effect of that could be delaying it.

TREASURER:

Well, I’m not going to speculate.

NEIL MITCHELL:

OK, is there anybody exempt in this Budget?

TREASURER:

We are keeping our promises, I want to emphasise that, we are keeping our promises. You know, Neil, the challenge that we are meeting is, we are not laying down a Budget for one year, we are laying down a Budget that is going to improve our destiny for the next 10 years. Even decisions we have made so far go out to 2050 and have a huge impact on Australia in 2050. So this is a structural Budget, and if Australians are expecting that the Budget is going to be about their own personal interest, the ‘me’, I’d say to you, we have got to focus on the ‘we’. What is good for the future of the country?

NEIL MITCHELL:

I’m getting a lot of calls about superannuation. Is superannuation untouchable?

TREASURER:

We have said that we are not going to adversely change superannuation in our first term of Government.

NEIL MITCHELL:

So there could be changes in the future.

TREASURER:

I’d just say to people, we are honouring our commitments but we are also going to lay down a road map to make everything sustainable. Now, whether it be a pension, pensions change every year, according to whatever the uplift is in male total average weekly earnings. So, pensions change every year, superannuation, because of investment returns, changes every year. But the bottom line is, where there are structural changes, people will see that we are laying down a road map that makes sure that our quality of life is sustainable.

NEIL MITCHELL:

Reports today that the top public servant in the country is about to get a $42 000 pay rise. He is the head of Prime Minister and Cabinet, Ian Watt. Will those sorts of pay rises be reviewed?

TREASURER:

Well, the first I heard of it was when I read the paper this morning. They are set by an independent tribunal. I guess, you know, on the one hand you want to have, not you particularly, but I think everyone wants to have decisions taken out of the hands of the public servants and out of the politicians, and on the other hand, when they come back with independent decisions we don’t like, everyone wants politicians and public servants to step in.

NEIL MITCHELL:

So there is nothing you can do about that?

TREASURER:

It doesn’t look like there is.

NEIL MITCHELL:

OK, what about Pollies’ perks and pay? I mean, if everybody is carrying the load it has to be shared by politicians as well.

TREASURER:

Everyone will be making a contribution, Neil, everyone.

NEIL MITCHELL:

How will the politicians?

TREASURER:

Well, you’ll see on Budget night. Everyone will be making a contribution.

NEIL MITCHELL:

Could I perhaps be looking for some cuts to benefits to politicians?

TREASURER:

Everyone will be making a contribution, Neil, everyone, even radio hosts.

NEIL MITCHELL:

Oh, we make lots of contributions.

TREASURER:

You might be asked to make a bit more.

NEIL MITCHELL:

Really?

TREASURER:

Well, it depends, we’ll see.

NEIL MITCHELL:

What, there could be an increase in ah?

TREASURER:

I’m not going to speculate, I’m just saying everyone. Look, this is about the destiny of our country. I mean, I’m not using empty rhetoric, it is real. We are laying down the challenge. The fact is, every generation of Australians has done some heavy lifting for the next generation. It is now our turn. It is now our turn.

NEIL MITCHELL:

Who will carry the most?

TREASURER:

Those that have the most capacity to pay. If we are, we pride ourselves, rightly, in taking care of those most vulnerable in our community. But we have got to make sure that that is sustainable. You know, I mean, I heard critics say ‘oh it is outrageous to potentially have a co-payment on Medicare’. My electorate of North Sydney, one of the highest income, if not the highest income electorate in Australia, has one of the highest bulk billing rates in Australia. How is that fair? I mean, that is not fair. We have to ask people to make a contribution, a small contribution where appropriate, but a contribution to the sustainability of our quality of life.

NEIL MITCHELL:

Headline in The Age today, ‘Budget to target the elderly’, would you deny that?

TREASURER:

Absolutely, it is not targeting anyone. It is targeting our future and making sure it is sustainable. That’s just a bad headline.